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Bush's Next Target: Malpractice Lawyers (STEVE LOHR, 2/27/05, NY Times)

This month, the administration won the first round in its fight to curb litigation, as Congress passed legislation to sharply restrict class-action lawsuits against companies. Next up is medical malpractice. In his re-election campaign, Mr. Bush repeatedly decried "junk lawsuits" as the bane of the nation's doctors. The issue was deftly framed, and the subtext was clear: greedy lawyers were attacking the Marcus Welbys of America, good doctors doing their best.

In a speech last month in Illinois, Mr. Bush again called for strict limits on medical malpractice suits, including "a hard cap of $250,000" on what patients could recover for non-economic damages like physical and emotional pain and suffering. Returning to his election-year themes, Mr. Bush said doctors "should be focused on fighting illnesses, not fighting lawsuits."

"We need to fix a broken medical liability system," he said, and he called on Congress to act this year. This month, a medical litigation overhaul bill, mirroring the administration's proposals, was introduced in the Senate by two Republican senators, John Ensign of Nevada and Judd Gregg of New Hampshire.

THE medical liability system, health care analysts agree, is deeply flawed. But they also generally agree that the solution offered by the administration and the Republican Congress - putting a ceiling on damages - addresses only one aspect of the problem.

Medical liability policy, said Dr. William M. Sage, a physician and a law professor at Columbia University, should seek three goals: restraining overall costs, compensating the victims of medical mistakes and providing incentives for doctors and hospitals to reduce medical errors.

"There is a strong consensus among people who have really studied the issue that caps on damages would tend to keep costs down and make liability insurance more affordable for doctors," Dr. Sage said. "And there is a universal consensus that caps would do absolutely nothing to reduce medical errors or to compensate injured patients. If anything, caps on damages would make those problems worse."

Medical malpractice laws vary state by state. But California offers a glimpse of a future preferred by the administration and many Republicans in Congress. In 1975, California passed the Medical Injury Compensation Reform Act, which included a cap of $250,000 for damages like pain and suffering in malpractice cases. It did not limit economic damages for things like the cost of continuing care for a person disabled or wages lost because of medical errors. The law also curbed attorneys' fees on a sliding scale that prohibited them from collecting more than 15 percent on award amounts over $600,000, with higher percentages for the amounts below that sum. (In states without limits on fees, contingency payments to malpractice lawyers are typically about one-third of awards.)

Research varies on the likely impact of curbs on awards and fees, but a RAND Corporation study last year concluded that the California law had reduced the net recoveries for plaintiffs by 15 percent and had cut attorneys' fees by far more, an estimated 60 percent. Defendant liabilities, it calculated, were trimmed 30 percent because of the law.

One of the things we'll need as we transition to HSAs, which make patients into consumers again, is better reporting and dissemination of information about medical errors and who's making them, so that people can make informed choices about where to seek care. Making such a reporting system an element of this bill seems sensible.

Posted by Orrin Judd at February 27, 2005 10:37 AM